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China’s Securities Watchdog Advises Pause on RWA Tokenization

TL;DR

• China’s securities regulator has urged local brokerages to temporarily halt real-world asset tokenisation in Hong Kong, signaling caution toward offshore digital asset ventures.
• Hong Kong continues developing as a hub for blockchain-based finance, while Chinese firms’ shares rise amid growing virtual asset initiatives.
• The move reflects Beijing’s focus on risk management, regulatory alignment, and market stability amid the rapidly expanding RWA sector.
  

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China’s securities watchdog, the China Securities Regulatory Commission (CSRC), has reportedly advised several local brokerages to pause their real-world asset (RWA) tokenisation business in Hong Kong, according to sources familiar with the matter. The guidance highlights Beijing’s careful and measured approach toward overseas digital asset operations while allowing the sector to mature under regulated conditions.

RWA tokenisation converts conventional assets like stocks, bonds, funds, and real estate into blockchain-based digital tokens. Over recent months, multiple Chinese financial institutions have launched such innovative products in Hong Kong, seeking to leverage the city’s emerging digital asset ecosystem. At least two leading brokerages have received informal instructions from the CSRC to refrain from conducting RWA business abroad, as regulators aim to strengthen risk management and ensure underlying assets are fully legitimate.

Virtual Asset Growth Gains Momentum

Hong Kong has been actively positioning itself as a digital asset hub. Authorities, including the Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA), are reviewing RWA tokenisation regulations, drawing from global experience. This coincides with local stablecoin initiatives and rapidly growing investor interest in yield-generating blockchain products. Chinese brokerages like GF Securities and China Merchant Bank International have already introduced RWA-backed digital products, attracting notable market attention.

Chinese Companies Rally on Crypto Initiatives

Despite China’s cautious stance following the 2021 cryptocurrency ban, the sector continues to draw strong enthusiasm abroad. Shares in firms entering virtual asset markets in Hong Kong have surged, reflecting investor optimism. State-owned Guotai Junan International saw shares jump more than 400% after regulatory approval for crypto services, while Fosun International rose nearly 28% on its RWA-related engagements with Hong Kong authorities. Analysts note that these developments underscore the growing appetite for innovative blockchain-based financial products despite mainland regulatory limits.

The CSRC, HKMA, and FSTB have not provided immediate comment. The Securities and Futures Commission of Hong Kong also declined to respond, leaving the timeline for the CSRC’s guidance unclear. Meanwhile, the global RWA market is expected to expand significantly, with forecasts projecting values exceeding $2 trillion by 2030, reflecting a rapidly evolving opportunity for advanced digital finance innovation.